Tag Archives: BP

Boeing 737 Max – end of a brand?

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One year ago Boeing’s 737 Max was one of the most successful launches in company history.

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A re-imagining of the venerable 737 design, it used updated aerodynamics, materials and engines to achieve 14% greater fuel efficiency vs the base 737, to compete with the Airbus A320neo (and it competed quite well).  It was granted FAA approval in March 2017 and the first copy was delivered shortly thereafter.  The product strategy expanded to include 4 variants.

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Now, after 2 mass-fatality crashes, production is on hold, the global fleet is on an expanding grounding with no firm restart date, and the entire line’s future is in doubt, taking with it the fortunes of a host of related entities including GE, the FAA, and the town of Renton, WA, where the planes were built, among many others.

Is this the end of what we know as the 737 MAX? 

Surviving a crisis seems to be some combination of:

  1. severity of an ‘event’
  2. how likely are negative consequences to occur in the future
  3. A third key factor is management’s action to swiftly and effectively mitigate future risk

Some very well-known brands have survived severe crises.  All are very healthy today.

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  • Tylenol – while the fatalities were low, the Tylenol poisonings of the early 1980s were a huge public threat
  • Perrier – – in 1990, a crisis emerged when a toxic substance, benzene, was found in some bottles of Perrier
  • Firestone – – in the late 1990s and early 2000s, hundreds of people died related to accidents attributed to tread separation of Firestone tires, particularly on Ford products
  • There are others: Volkswagen (Dieselgate), BP (Deepwater Horizon), SeaWorld (orcas)

In all of these cases, Management worked to swiftly remove any affected (or associated) product from circulation, provided consumer hotlines, publicized the recalls, and provided clear ongoing updates to the public.

In all of these cases, there was a clear explanation given for what caused the issues, and the solution was directly linked to the cause.

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Other brands did not fare as well:

  • AYDS was a very popular diet-suppressant candy in the 1970s and 1980s, but could not survive the mid-80s emergence of the disease AIDS. Because this association was not likely to end, the candy fairly rapidly was withdrawn from the market.
  • ValuJet – a budget airline, its Flight 592 crashed in 1996, killing all 110 aboard. The severity of the crash brought the airline’s poor safety record to light, thus raising doubt about future safety.  A rebrand was attempted but the airline eventually was discontinued.
  • Vioxx – -an anti-inflammatory marketed by Merck, this brand had over 80 million users. It was withdrawn in 2004 following reports that it could accelerate heart attack and stroke, exacerbated by the fact that evidence was known for about 5 years prior to action being taken.

In two of these cases, the severity of consequences was high, and there was low confidence that a long-term solution was possible.  In the third, the brand was associated with a disease with severe consequences – – just bad luck.

So will Boeing’s 737 Max survive?

  • High consequences from failure
  • No definitive cause or solution identified
  • Indecisive management reaction pushes resolution into the hazy future

The longer the lack of clarity lasts, the more doubt will grow around the 737 Max.  (As they said of the moon shot: “a million things have to go right.  Only one thing has to go wrong”.)

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After a quick check of the headlines, put me down for a no.

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How do you make a $370 Billion Oil Company seem Sympathetic?

Compare it to Lawyers!  Of course!  And that’s what BP seems to be doing to support their brand.

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Is this a good move?  Vote Below.

You’ve probably seen BP’s full-page ads in the Wall Street Journal and other major papers.  They’ve been unfolding since June while an appeals process went on; the final version is below.

At issue is BP’s claim that it is being taken advantage of by lawyers and people who were never financially hurt by the massive 2010 oil spill in the Gulf of Mexico.  Along the way the ads have emphasized the $14 billion in restoration costs and $12 billion in claims paid out since the 2010 Gulf oil spill, as well as pointing an oily finger at lawyers who, they claim, are defrauding BP by securing settlements for parties who didn’t sustain any damage.

A BP spokesperson put it this way: “Today we are working to ensure that our willingness to do the right thing is not taken advantage of and distorted to provide windfalls to undeserving businesses, including law firms…”

[This is not the first time an erstwhile villain garnered our sympathy by bravely battling an even more evil opponent.  In 1964 many of us had to admit that we were secretly rooting for Godzilla as he withstood the savage attacks of Mothra.  But I digress.]

Godzilla vs Mothra

So what is the point of a $370 billion company that committed a huge ecological mistake and is in an industry that the public generally views more negatively than positively, in placing these very public ads positioning it as a victim?  Certainly the BP brand has taken its share of shots in the last few years; maybe they are trying to provide a positive counterbalance?

The answer might be illuminated by considering who the target might be.
– the general public?  hardly – – seriously,  a fight between an oil company and lawyers?  Aren’t we hoping they both lose?
– Institutional investors?  possibly – – but if the intent is just to demonstrate that BP is supporting its brand, running ads is pretty low on the list of investors’ considerations.
– Retail investors – – probably doesn’t hurt — probably pleased to see a company fight to preserve profitability.  But there isn’t much meaningful outcome that would be expected from this group.
– Legislators?   A likely target, and this might just be part of BP’s ongoing and significant lobbying efforts.

Without weighing in personally, I’ll leave it to my readers.   It’s important to defend your brand, but how it’s done is really important.

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